Home prices, inventory rise locally

Home prices in Solano County again rose by double-digits compared to last year, which will likely motivate more sales, a local real estate professional said Monday.

Based on the latest report by CoreLogic, a global property information analytics provider, Vallejo area home prices, including distressed sales, increased 24 percent in May compared to May 2013. They also rose 1.2 percent compared to April, according to the report.

Excluding distressed sales, year-over-year prices increased 18.5 percent compared to May a year ago, and .4 percent compared to April.

Combine this with a change in banking laws starting next month requiring short-sellers to wait four years before buying another home, and Solano Association of Realtors President Toni Foster said we can expect to see a flurry of home buying in the next few weeks.

"Its been really interesting how the rules have changed over and over," said Foster, adding that for several years, a short sale meant the home owner had to wait two years to buy another house. Owners whose homes are foreclosed on must wait seven. "This is going to change things for a lot of people, and we're trying to get the word out. It may prompt people to buy now, rather than wait. Otherwise, they may be waiting longer than they expected."

Foster said the local real estate market behaved oddly for May, with fewer buyers, as prices continued rising and available inventory grew.

"This year all the Realtors are wondering what happened in May. There hasn't been any real bad news, and we still don't have enough inventory, so we don't know what happened," she said.

That more homes are coming on the market is less of a mystery, she said.

"Equity — people finally have it, so they can finally afford to sell and move someplace else," Foster said.

In Benicia, there are 28 listings of single family homes right now, up from six at the start of the year, she said. In Vallejo, where there have been fewer than 100 homes on the market for most of the year, there are now 122, she said.

"I think it means that because there's been such a limited inventory for so long, people can now sell with equity and have some money left to make their next move," Foster said.

"Going up that much percent, it puts that many more people in a position to make an equity sale," she said.

CoreLogic's newly released May Home Price Index report also found home prices nationwide, including distressed sales, increased 8.8 percent in May compared to a year ago – the 27th consecutive month of year-over-year increases. On a month-over-month basis, home prices nationwide, including distressed sales, increased 1.4 percent in May compared to April, it shows.

At the state level, including distressed sales, no states posted depreciation in May and 25 states and the District of Columbia were at or within 10 percent of their peak home price appreciation, CoreLogic found. Also, California, Hawaii and Nevada saw the country's strongest year-over-year appreciation.

Excluding distressed sales, home prices nationally increased slightly more than 8 percent in May compared to May 2013 and 1.2 percent compared to April. Also excluding distressed sales, all 50 states and the District of Columbia showed year-over-year home price appreciation in May.

CoreLogic forecasts home prices will continue rising in June, but more slowly, officials there said.

"Home prices are continuing to climb across most of the country which has both positive and negative implications for the housing market," CoreLogic president and CEO Anand Nallathambi said. "While the rapid rise in prices over the past two years has lifted many homeowners out of negative equity, it has also become a negative factor in buying decisions for prospective purchasers weighing affordability concerns. As we move ahead, a moderation in home price increases over the next twelve months should help cool things down a bit and keep the housing recovery going."